Navy reducing IT spending ahead of schedule

Ask the CIO - Jan. 17, 2013

The Department of the Navy didn't just set itself a goal of reducing its IT spending over the next five years.

DoN chief information officer Terry Halvorsen and his superiors are demanding real dollar savings — no cost avoidance will be accepted — that equal a 25 percent reduction starting from a baseline of $7.6 billion as of fiscal 2011.

"It's all about the money," he said. "For that particular goal, there is only one metric. Did you achieve the amount of savings that you have to achieve each year to meet the goal? The answer is right now we are on track and slightly ahead."

Halvorsen wouldn't say by how much they are ahead by, but said it's "a couple of percentage points," and they are on track to save 5 percent a year for five years.

"My leadership has defined savings as we have reduced spend. This is not a cost avoidance drill. This is not a 'we moved money.' This is 'we reduced spend.' These are the same rules you'd apply to your house — you've spent less money on something. You actually achieved savings, that is the definition and we are not confusing this with cost avoidance. That's one of the things that makes it harder."

Results are real

The Department of the Navy initiated several efficiency efforts over the past two years to reach their spending goals, and it's already seeing results.

"We were able to achieve some things in 2012 that we initially didn't think we'd be able to get in 2012. That has helped," he said. "And then, on the mobility, we have done better than we thought we could in managing the contracts. Enterprise licenses are coming right about where we predicted, but we got an early savings in 2012. Data centers are right where we said it would be."

Halvorsen said Navy is working on several new enterprise software licenses to build up the success its had with Microsoft. The service is targeting the vendors it buys the largest amount of software from, including Oracle, Hewlett-Packard and EMC.

"What we are trying to do with enterprise licenses is look at who we spend a lot of money with and see whether that makes a good opportunity for a DoN enterprise license and in some cases is it a good opportunity for a DoN and other services set of licenses," he said.

Halvorsen said he expects one or two new enterprise contracts by mid-summer 2013.

The DoN signed a $700 million deal with Microsoft in July to consolidate dozens of separate contracts into one.

"In fiscal 2012, we've seen on ELA and other license efficiencies about $9 million," Halvorsen said. "We are projecting very good results in 2013."

Managing printers and mobile devices better

Along with enterprise licenses, the DoN is seeing savings from reducing the number of printers and the way employees print documents.

"We've gone into an office and just taken their printer. Obviously, it was pre-coordinated with leadership, but it is about changing the culture, not just about printers," Halvorsen said. "We did a pilot on the printing and now we will roll it out DoN-wide. We want to go to multi-function devices. It saves a lot of money."

The Department of the Navy also is looking at enterprisewide print services. He said the services are looking to partner with the Defense Logistics Agency and others military organizations on managing print services more efficiently.

Mobile is a third area where DoN is finding savings, in fact more quickly than expected.

Halvorsen said the major commands and echelons now have tools to better track the number of devices they are paying for and how many minutes they are using.
"We buy as a bigger group, which drives the cost down," he said. "We have the ability to partner between commands, and they are aggressively taking advantage of that."

Halvorsen said the consolidation of mobile devices and services has saved the Department of the Navy about $12 million in 2012.

Applications rationalized

Consolidating data centers is giving the DoN more trouble than the other initiatives.

"It's taking a little longer on the application rationalization side to look at all of that, but it is going well and we are on target for what we want to get," Halvorsen said. "And then you have all the complexities of all of the things you have to consider as you pick what data centers to go to. We also are expanding our interests in where it both makes sense from a financial standpoint and where it's supported by current policy we can go to commercial data centers."

He said his office will launch a pilot to move public websites within the DoN secretariat to a commercial cloud.

Halvorsen added the DoN plans to get down to fewer than 25 data centers from more than 100 by 2017.